HIGHLIGHTS FOR THE MONTH OF JANUARY 2008

By: Adam S. Belzberg

RECENT DEVELOPMENTS

Employee Walkout To Protest Manager Termination Is Not Protected Under The NLRA

The U.S. Court of Appeals for the Fourth Circuit recently held that an employee walkout to protest the firing of a supervisor was not protected activity under the National Labor Relations Act (NLRA).

Facts of the Case: In Smithfield Packing Co. v. NLRB, a supervisor who believed he was going to be terminated encouraged a large number of employees to stage a walkout. As a result of the walkout, the employees (who were responsible for cleaning the plant during the night shift so production could resume the next day) did not complete their work, and the plant could not open for production the following day. The supervisor was ultimately terminated, which led to a series of disputes and physical fights on the property in the following days. The employees’ union brought a charge against the Company alleging that it violated the NLRA by “threatening, beating, and falsely arresting employees.” The National Labor Relations Board (NLRB) agreed with the Union, concluding that the walkout was protected activity under the NLRA. The Company appealed the Board’s ruling to the Fourth Circuit.

The Court’s Ruling: On review, the Fourth Circuit concluded that the NLRB’s “approach of protecting [employee reactions to supervisor terminations] regardless of reasonableness, utterly fails to account for the bedrock principle that management’s role is to be faithful to the employer, not the employee.” The Fourth Circuit explained that the reaction of employees to the termination of a management employee must be “reasonable” in order to be protected by the NLRA. Finding that the employees had reacted unreasonably, the Court stated that the walkout “strayed into the realm of unprotected activity” because it “risked requiring 2,000 to 3,000 workers to lose one day of work.” Further, the Court recognized that changes in supervisory personnel normally do not amount to an actual condition of employment, which must be at the heart of protected concerted activity.

Lessons Learned: Section 7 of the NLRA (which protects employees who engage in “concerted activities for the purpose of collective bargaining or other mutual aid and protection”) is intended to protect employees, and may not be used as a means of interfering with an employer’s right to make managerial decisions that do not affect actual working conditions.

Employee Awarded Punitive Damages for Employer’s Refusal to Provide a Sign Language Interpreter

The U.S. Court of Appeals for the Fourth Circuit affirmed an award of punitive damages for a deaf employee, holding that the employer violated the Americans with Disabilities Act (ADA) by failing to provide him with a sign language interpreter.

Facts of the Case: In EEOC v. Federal Express Inc., the EEOC filed suit on behalf of the employee ,alleging that the employer had violated the ADA by refusing repeatedly to provide him with a sign language interpreter during training sessions and company meetings (that included briefings after September 11th regarding potential anthrax exposure and other safety concerns), and for terminating the employee in retaliation for filing an EEOC charge. The company failed to engage in any discussion of possible accommodations. The employee was awarded $8,000 in compensatory damages and $100,000 in punitive damages.

The Court’s Ruling: On appeal, the Fourth Circuit rejected the employer’s arguments that the punitive damages award was excessive and that its managers had made good faith efforts to comply with the ADA’s accommodation requirements. The evidence revealed that the managers never provided the employee with an interpreter; irregularly provided the employee access to closed-captioned video training sessions (and when it did, it was always after the training session, and not contemporaneously); did not regularly provide the employee with written notes of training sessions (and when notes were provided, they were written in English, which was not the employee’s first language). The Court concluded that the lower court correctly held that the employer had “acted with malice and reckless indifference to [the employee’s] federally protected rights” under the ADA.

Lessons Learned: This case emphasizes the point that when an employee makes a request for a disability-related accommodation, the employer must act in good faith by taking part in the interactive process of attempting to determine and implement a suitable accommodation. While the employer may not necessarily be required to provide the employee’s first choice of accommodation, there must be a legitimate dialogue and attempt to provide a workable solution that permits the employee to perform his job duties on par with his non-disabled co-workers.

TAKE NOTE

Vacation Pay. Unused vacation time is now considered a “wage” under Maryland law and must be paid to departing employees regardless of company policy. Responding to the Maryland Court of Special Appeals (the state’s intermediate appellate court) unpublished decision in Catapult Technology, LTD v. Paul Wolf, the Maryland Department of Labor, Licensing and Regulation (DLLR) revised its “Guide to Wage Payment and Employment Standards” to now state that: “When an employee has earned or accrued his or her leave in exchange for work, an employee has a right to be compensated for unused leave upon the termination of his or her employment regardless of the employer’s policy or language in the employee handbook.” The DLLR’s new interpretation of Maryland law regarding vacation pay reinforces the notion that cautious employers will want to pay out unused but accrued vacation leave to departing employees, regardless of reason for termination.

Gender Identity Discrimination. Montgomery County, Maryland has amended its Human Rights Law to include “gender identity” as a basis for protection from employment discrimination. The amendment to Montgomery County’s Human Rights Law takes effect on February 19, 2008. Under the amendment, gender identity means “an individual’s actual or perceived gender, including a person’s gender-related appearance, expression, image, identity, or behavior, whether or not those gender-related characteristics differ from the characteristics customarily associated with the person’s assigned sex at birth.” Under the new law, an employer may require “an employee to adhere to reasonable workplace appearance, grooming, and dress standards that are nondiscriminatory” but may not interfere with the employee’s ability to “appear, groom, and dress consistent with” his or her gender identity. Employers must also permit employees to use restrooms, locker rooms, changing rooms, showers or similar facilities associated with the gender identity asserted by the individual. Employees, of course, must have a bona fide association with a particular gender, and cannot switch “back and forth.” Gender identity differs from sexual orientation, with the new protected category relating to how a person views himself or herself as well as how others view that individual. The latter category relates to a person’s physical or emotional attraction to members of the same and/or opposite sex. Employers in Montgomery County will want to update posters, handbooks and training to include this new protected category.

Hostile Work Environment Harassment. In Bright v. Hill’s Pet Nutrition, Inc., the U.S. Court of Appeals for the Seventh Circuit held that a hostile work environment claim could include conduct that occurred years before the plaintiff filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC), despite the fact that Title VII requires an EEOC charge to be filed within 300 days of the allegedly discriminatory act. After working for the employer at a single location for three years under various supervisors and in different work groups, the Plaintiff filed suit under Title VII of the Civil Rights Act alleging hostile work environment discrimination that dated back to the commencement of her employment. The district court limited the plaintiff to evidence of allegedly harassing conduct that occurred no more than 300 days before she filed her EEOC charge. On appeal, the Seventh Circuit reversed the lower court, reasoning that the jury should have been allowed to consider the alleged hostile conditions that the Plaintiff endured during her entire employment at the facility because a hostile work environment involving employment at a single location constitutes one unlawful practice for purposes of Title VII.

FMLA. In Sarnowski v. Air Brook Limousine Inc., the U.S. Court of Appeals for the Third Circuit held that the Family and Medical Leave Act (FMLA) does not require employees to comply with a company policy requiring a written request for FMLA leave in order to be protected by the FMLA. After a series of heart-related health issues, the plaintiff informed his supervisor that he might need to take six weeks off for heart surgery. The plaintiff was terminated eight days later for performance-related issues. He filed suit, alleging that the employer had interfered with his FMLA-protected rights by terminating his employment after learning that he may need to undergo heart surgery and take FMLA leave. The district court ruled for the employer, deciding that the employee was not protected by the FMLA because he did not submit a formal request for leave, as required by the employer’s FMLA policy. On appeal, the Third Circuit reversed. Citing decisions of the Fifth, Sixth, and Eighth Circuits, the Court concluded that, under the FMLA and its regulations, the employer had received sufficient notice of the plaintiff’s intent to take FMLA-qualifying leave, thereby entitling the plaintiff to the Act’s protections. A written request for leave is not required in order to trigger the FMLA.

FLSA. In Roe-Midgett v. CC Services Inc., the U.S. Court of Appeals for the Seventh Circuit held that insurance claims adjusters may be properly classified as exempt administrative employees under the Fair Labor Standards Act (FLSA). The district court held that the adjusters were properly classified as exempt administrative employees because their primary duties involved matters that were directly related to management policies or general business operations requiring the exercise of discretion and independent judgment. On appeal, the Seventh Circuit rejected the adjusters’ contention that they do not exercise independent judgment because they rely on estimating software. The Court concluded that the software does not eliminate the need for adjusters to exercise discretion and independent judgment.

TOP TIP

Overtime Must Be Paid For All Time In Excess Of Forty Hours Per Week, Even If Employer Refused To Authorize Overtime

In Chao v. Gotham Registry Inc., the U.S. Court of Appeals for the Second Circuit held that employees must be paid overtime wages, even if the employer has a policy requiring employees to obtain authorization before working any overtime. This case involved agency nurses who were sometimes asked to work overtime by the host hospital. Under the agency’s overtime policy, the nurses would be compensated only for overtime hours that were authorized by the agency. The Court held this practice unlawful. This case emphasizes the seemingly obvious (yet often neglected) requirement of the Fair Labor Standards Act (FLSA) that employees must be paid for all hours worked. While an employer has the right to discipline employees who work overtime without proper authorization, it cannot refuse to pay its employees for any such overtime hours actually worked.

For greater clarification of any of these issues, you may contact any Shawe Rosenthal attorney.

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